CREATING GREAT PLACES COMPANY PRESENTATION JUNE 2020
CONTENT Liad Barzilai 3 Atrium in a snapshot Group CEO 4 Q1 2020 results overview c.12 years at Atrium, c.14+ in real estate Prior experience as CIO of Gazit-Globe 8 Covid-19 impact 11 Focus on Poland and the Czech Republic Ryan Lee Group CFO 16 Changing retail environment c.5 years at Atrium 19 c.20 years experience as CFO in Central Europe Value creation - Redevelopment projects 21 Atrium by 2024 26 Summary 28 Appendix 1 - E-commerce and SC space data 29 Appendix 2 - Top 10 tenants 2
ATRIU M IN A SNAPS H OT CE portfolio focused on quality urban assets in €2.6bn €1.7bn €0.5bn Poland Czech Warsaw and Prague €1bn €0.4bn standing investment 5 assets Warsaw 2 assets Prague portfolio Conservative Balance sheet with strong liquidity 1 34.5% €446m net LTV Cash and RCF €328m as at 11/6/2020 4.6 yr 72%/€1.9bn average maturity unencumbered assets 3 1 Based on portfolio fair value of 31 December 2019 The portfolio fjgures exclude 5 assets classifjed as held for sale
Q1 2020 RESULTS OVERVIEW 4
+3.0% LFL NRI POLAND AND CZECH EXCL. THE IMPACT OF COVID-19 LFL Net rental income excl. the impact Underlying net rental income broadly fmat of Covid-19 (in million €) +2.7% +4.8% -3.9% +1.9% +3.1% 46.2 36.3 Poland Czech Slovakia Russia Group €5.3m Covid-19 impact €4.8m impact of asset rotation +3.0% Poland and Czech • +1.9% Group LFL NRI • +2.1% Group LFL NRI excl. held for sale assets • 3M 2019 3M 2020 Russia- impact of previously announced anchor retenanting • 96% Occupancy Operating margin (31/03/2020) 97.0% 95.5% 96.4% 91.0% Covid-19 (Poland) and redevelopments impacted the Group operating margin Occupancy remained strong at 31/3/2020 (no Covid-19 impact yet seen) 31.12.2019 31.03.2020 3M 2019 3M 2020 5
EARNINGS: AFFECTED BY THE DECREASE IN NRI Underlying EBITDA margin fmat at 88% 41 41 (in million €) 31 88% 88% 85% EBITDA as % of NRI 3m 2019 3m 2020 3m 2020 adj. for Covid-19 impact and asset rotation Company Adjusted 30 EPRA Earnings 29 (in million €) 18 3m 2020 adj. for 3m 2019 3m 2020 Covid-19 impact and asset rotation Company adjusted EPRA earning p.s. (€ Cents) 7.8 4.8 7.5 6
A STRONG FINANCIAL POSITION TO MANAGE OUR LIQUIDITY NEEDS DURING THE COVID-19 PANDEMIC Bond and loan maturities 1 Net LTV 34.5% 3 2 €446m 4.6 cash years (in million €) 31/3/2020 average maturity Next bond repayment is not 40% remains our long due until October 2022 460 term target 37.9% 294 35.1% 34.5% 30.1% 163 114 109 31/12/2017 31/12/2018 31/12/2019 31/3/2020 April 2020 2022 2025 2026 2027 Paid 2 Revolving credit facilities fully drawn, €133m bonds settled by April 2020 3 Post bonds repayment in April 2020 Borrowings Financial Performance Indicators 72%/€1.9bn (as at 31/03/2020) unencumbered Bonds €863m standing investments EPRA NAV per share Cost of Debt Loans €300m RCF €300m € 1.5bn ¹ €4.92 c. 3% Total Debt 31/12/2019 €4.96 Moody’s: Baa3 (negative) Fitch: BBB (stable) 1 Based on portfolio fair value of 31 December 2019 7
COVID-19 IMPACT 8
IMPACT OF COVID-19, POLAND, CZECH AND SLOVA K IA REOPENED Reopening of our shopping centres : 86 % G L A is open in Poland, Czech and Slovakia and is expected to increase progressively, whilst footfall is also gradually increasing ■ Opening dates: Poland 4 May, The Czech Republic 11 May, Slovakia 20 May, Russia - our 2 shopping centres in Moscow opened on 1 June ■ 85% GLA is open in Poland, 88% in Czech and 91% in Slovakia ■ The trading indications are positive and customers are reacting positively to the new safety rules Government imposed trading restrictions have been applied to shopping centres in all our countries of operations ■ In Poland, tenants can receive mandatory rental and service charge relief in exchange for lease extensions of 6 months + the time that the unit was in an enforced closure ■ The Czech government approved a rent subsidy program for April- J une where 50% of the rent is paid by the state, 20% by the tenant and 30% landlord ■ In Russia, the rent for the closed period and 50% of the rent until October 2020 will be deferred to 2021-2023 90% of rent due for Q1 2020 was collected, 7 2% of rent due for April (20 % of rent roll including one time Polish imposed rent relief ) and 6 2% for M ay ( 2 4 % of rent roll ) 9
COVID-19 – WHERE THE COMPANY STANDS Atrium’s management believes the Company is well placed to cope with the Covid-19 pandemic In addition to a portfolio of high-quality assets, Atrium is in a strong financial position with sufficient liquidity to enable it to continue its operations and meet its obligations Strong financial flexibility | Cash balance of €328m as of 11/6/2020, revolving credit facilities fully drawn | 72%/€1.9bn unencumbered assets | Low net LTV of 34.5% 1 | €133m bonds matured and settled by April 2020, next bond repayment is not due until October 2022 Atrium action plan | Cost reduction and cash preservation ■ Signifjcant reduction in non-essential capital expenditures of approx. €15m to €11m for 2020, €3m reduction in operational costs and €2m in administrative costs ■ €54m of planned investment in redevelopments for 2020 postponed to 2022/2023 | Continuous dialogue with our tenants about a joint approach to address the challenges that Covid-19 is presenting | A voluntary Scrip Dividend Programme for each of the Q2, Q3 and Q 4 2020 dividend distributions 4 10 1 Based on portfolio fair value of 31 December 2019
FOCUS ON POLAND AND THE CZECH REPUBLIC 11
PORTFOLIO OVERVIEW, WARSAW AND PRAGUE CENTRIC ASSET BASE Dec. 2019 Market Net equivalent yield RUSSIA % value €m 11% POLAND Warsaw 1,006 5.2% 65% Other Poland 689 6.5% SLOVAKIA WARSAW 38% OTHER POLAND 27% 4% POLAND 1,695 5.7% € 2.6bn CZECH Prague 418 5.1% 6.4% yield REPUBLIC Other Czech 104 5.8% 20% PRAGUE 16% CZECH REPUBLIC 522 5.3% OTHER CZECH 4% Slovakia 121 6.7% Russia 287 12.8% The portfolio figures exclude 5 assets classified as held for sale, an agreement was signed TOTAL 2,625 6.4% with completion expected in the third quarter of 2020 12
CONTINUED ASSET ROTATION INTO PRIME DOMINANT ASSETS IN MAJOR CITIES 2014 to date: €0.5bn prime assets purchased, €0.8bn secondary assets sold 2019: €0.4bn secondary assets sold at or above book value, King Cross, our 5th asset in Warsaw purchased for €43m 29% in Warsaw and Prague in 2014 —› 31/03/20: 54% WARSAW THE HEART OF POLAND ¹ WARSAW POLAND PRAGUE THE HEART OF THE CZECH REPUBLIC ¹ PRAGUE CZECH Nr of inhabitants 1.8m 38m Nr of inhabitants 1.3m 10.7m Average monthly salary €1,586 €1,143 Average monthly salary €1,667 €1,326 31/03/20: 31/03/20: 38% in Warsaw 16% in Prague Atrium Flora Atrium Targowek King Cross Arkady Pankrac Wars Sawa Junior Atrium Promenada Atrium Reduta 13 ¹ Czech and Prague Statistics Offjces ¹ Central Statistical Offjce of Poland, GfK
STRATEGIC FOCUS AND FUTURE GROWTH: CE SIGNIFICANTLY ABOVE EUROPEAN AVERAGE Portfolio Repositioning - Strong Operational Excellence Strong Financial Profile And Liquidity Macro Environment and Urban To Support Growth Demographic Growth 26 assets managed by our internal professional team 1 High quality assets in strong urban locations 34.5% net LTV, 4.6 years average debt maturity, 3% cost of debt Strong, diversified range of retail and leisure operators Focus on Poland and Czech – region’s strongest economies that are appealing to consumers €300m revolving credit facility (fully drawn) Scaling up in Warsaw and Prague – over 50% of the portfolio Forging strong long term relationships with our tenants 72%/€1.9bn unencumbered standing investments 43% of our rent and over 50% of GLA is from well known global retailers Strong occupancy and operating margin of 96% and 95.5% 2 , respectively Strengthening the portfolio through extensions and portfolio rotation, evaluating diversifications Deep expertise in CE retail market , 370 employees, pro active hands-on asset management Increasing experience and offer, adding 70,000 sqm in Warsaw 1 Arkady Pankrac is managed by an external manager 14 2 Q1 2020 excl. the impact of Covid-19 and redevelopments
POLAND AND CZECH - STRONG RECOVERY EXPECTED IN 2021 | CE countries go into the crisis in much better shape financially than Western Europe and responded quicker to Covid-19 | Poland and Czech implemented early and effective lockdowns and as a result have already been able to ease restrictions | Growth contraction and fiscal support packages will see fiscal deficits and debt ratios spike, however, Poland and Czech starts with a moderate debt ratios | Considerable hit from Covid-19: Poland +4.1% GDP in 2019 and -5.3% expected in 2020F, Czech +2.4% to -6.0% in 2020F | Rebound expected in 2021 to +5.0% in Poland and +5.5% Czech | Retail sales are expected to be positive in 2020 for Poland at c.+2% and c. +6% in 2021, Czech: c. -2.5% in 2020 and c.+8% in 2021 Czech Poland Republic GDP growth Unemployment GDP growth Unemployment 9.9% 7.5% 8.0% 6.0% 5.5% 5.0% 4.1% 3.3% 2.4% 2.0% 2019 2021F 2019 2020F 2021F 2019 2021F 2019 2020F 2021F -5.3% -6.0% 2020F 2020F 15 Source: IMF, Capital Economics Source: IMF, Capital Economics
CHANGING RETAIL ENVIRONMENT 16
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